Market ReviewStock Market

The KOSPI soared 6.44% from the previous month to 2,347.38 points at the end of May 2017, taking an uptrend for

six consecutive months. It demonstrated the largest monthly increase among global major stock markets. In the

technical aspect, both the KOSPI and well-ordered mid and long-term moving average lines became increasingly

steeper and trading volume also rose, which represented stronger purchasing power.

This rally resulted mainly from expectations on economic policy of the new administration, higher-than-expected 1Q

operating performances of the domestic companies, increasing preference for risky assets throughout the global

financial market. Moreover, continuing export growth and stable US dollar and Japanese yen which are recognized

as safe assets contributed to making investment environment positive.

The overwhelming view in the stock market is an additional growth in June. This is underpinned by expectations on

prolonged export growth and favorable economic policy of the new administration as well as recently recovered

consumer confidence.

IR WEBZINE2017. May

Market ReviewStock Price

The stock price of Coway stayed KRW 100,500, the same level of the previous month. It showed a strong movementthat exceeded the previous high point, while entering level-off since the block deal with institutional investors in mid-June. In the technical aspect, it is likely to find a momentum for rebound on mid and long-term moving average lines.

Coway achieved 1Q operating performance that met market consensus and proved that its rental sales nearlyrecovered the level of ice water purifier issue. Furthermore, Coway has favorable investment attractions such asunrivaled leading position in the health appliance market, excellence in creating cash through its stable rental businessmodel, continuously growing overseas business, and relatively high dividend payout ratio. These factors will raiseinvestors’ expectations on our corporate value.

During May, the number of shares held by foreigners increase 3,106,956 shares, or 7.5%, compared with the priormonth. As of the end of May, they maintained 59.06% ownership. Domestic institutional investors also marked netpurchasing of 564,109 shares during the same period.

Classification% change of COWAY %change of

KOSPI%change ofKOSPI200Stock Price vs. KOSPI vs. KOSPI200

5 Days -0.50 -1.79 -1.48 1.30 0.98

20 Days 0.00 -6.24 -6.03 6.24 6.03

60 Days 13.43 1.79 1.69 11.64 11.74

IR WEBZINE2017. May

3,106,956Shares(7.5%)

564,109Shares

0.00%

Changes in Stock Pricein May

Changes in Shares Held byForeigners in May

Net Changes in Shares Held byInstitutional Investors in May44,651,322 Shares

(59.06)

(as of May. 31, 2017)

Market ReviewAnalyst Opinion

• Strong Buy

• Buy

• Hold

• Underperform

• Sell

0

2

0

0

0

Average Ratings Average Target Price = \122,500

Sell StrongBuy Low :\115,000

High :\130,000

2017-05-02 | Samsung Securities | Target Price : 115,000 | BUY

Non-core operations behind 1Q beatCoway on Apr 28 reported that its sales and operating profit both fell by 2% y-y in 1Q, with the former missing ourestimate by 3% as the latter beat it by 8%. The firm also said it will also cancel treasury shares …

FULL REPORT VIEWIR WEBZINE2017. May

2017-05-02 | Mirae Asset Securities | Target Price : 130,000 | BUY

Full normalization appears imminentFor 1Q17, Coway delivered preliminary consolidated revenue of W610.2bn (-2.2% YoY), operating profit ofW120.9bn (-2.2% YoY), and OP margin of 19.8%. Revenue was broadly in line with our estimate …

FULL REPORT VIEW

2017-05-02 | Korea Investment | Target Price : 100,500

Mix of hopes and fears1Q17 consolidated sales fell 2.2% YoY to W610bn and OP 2.2% YoY to W121bn (OPM 19.8%), in line with ourestimate and 11% above consensus. Rental-relate sales (rentals + memberships) declined 4% YoY,…

FULL REPORT VIEW

Coway News

Won the Minister Prize for the equal employment from the Ministry ofEmployment and Labor

Coway won the Minister Prize at the ceremony for awarding excellentcompanies in equal employment for 2017 hosted by the Ministry ofEmployment and Labor on May 31.

The event was prepared to build a culture of employment where male andfemale can work on an equal footing. To this end, the Ministry of Employmentand Labor evaluates the level of equal employment of companies and awardsexcellent performers every year.

At Coway, the rate of female employees is relatively high and diverse systems forequal employment are running. Anyone can use childcare leave withoutdistinction of gender and the company monitors to prevent childcare leave usersfrom any disadvantage in job evaluation and promotion. Coway was also highlyrecognized for its effective systems to support work-life balance.

Moreover, the company has developed mobile groupware to help employeeswho are having maternity and childcare leave. Family-friendly welfare benefitprograms include the Coway Day to invite employees’ families to the companyand support healing travels, lending farm to employees for free, and a leavesystem for refreshing.

These differentiated efforts resulted in winning the grand prize at the top 100large companies with great workplace hosted by the GWP Korea in 2016, whichwas the sixth achievement in a row. In 2017, Coway won the Minister Prize forthe equal employment from the Ministry of Employment and Labor following2013.

Jae-ho Lee, the head of Business Management Division, said, “It’s moreimportant to create good environment to work beyond the equal employment.We will continue to make best efforts to activate communication amongemployees.”

IR WEBZINE2017. May

Coway News

Coway’s air purifiers to catch popularity in Taiwan

On May 26, Coway held an event to launch new air purifier models in Taipei,Taiwan, with the aim of gearing up for full-scale penetration in the Taiwanmarket.

Since the entrance into the Taiwan market in 2008, Coway has sold air purifiers,water purifiers, and bidet. Particularly, air purifier sales have sharply increasedfrom the previous year backed by the environmental factor and enhancement ofmarketing activities. Coway’s air purifier sales in the first half of this year soaredmore than three times compared with the previous year. In March, Coway’s AP-1009CH model ranked second (as of GFK data) in the Taiwanese air purifiermarket on a sales basis.

At the launching ceremony, Coway showcased three new air purifier modelsincluding “multi-action air purifier (AP-1516D.” This product features rapid andstrong air quality control by four-mode multi-action functions, winning greatpopularity.

Yong-sung Kim, the head of Overseas Business HQ, said, “We intend topreoccupy the air purifier market in Taiwan which is rapidly growing bylaunching new products, enhancing marketing activities, and expandingdistribution channels. We will also drive entrance into overseas markets bycontinuously introducing trend-leading innovative products.”

Today, Coway’s air purifiers are sold in about 30 countries.

- Held a launching event for three air purifiers- Export of air purifiers to Taiwan for 1H 2017 increased more than three times compared with the previous year.

IR WEBZINE2017. May

Coway News

IR WEBZINE2017. May

Operating the “Care Zone” at JW Marriott Hotel

With the aim of providing clean air without fine dust, Coway started theoperation of the “Care Zone” by signing a business agreement with JW MarriottHotel located in Yoi-do, Seoul. The “Care Zone” is a pleasant space whereCoway’s water purifier, air purifier, and bidet are installed. Coway plans tocontinue to expand the “Care Zone.”

The “Care Zone” is offered to customers of the hotel who use the “clean coolingpackage” service. Coway’s multi-action air purifier model (AP-1516D) equippedwith the “Air Dynamics” technology is installed in those hotel rooms. Thisproduct features rapid and strong air quality control by four-mode multi-actionfunctions.

Yong-joo Park, the head of Marketing HQ, said, “Multiuse facilities such as hotel,kids’ café, and hospital need more systematic air quality control. Therefore, we plan to expand the Care Zone step by step in order to provide pleasant andclean air with the responsibility as the market leader.”

Currently, the Care Zone is operating at Cha Hospital and its affiliated postnatalcare center and Teddy Bear Theme Part in Korea and Kuala Lumpur InternationalAirport in Malaysia.

- Installing Coway’s air purifiers at JW Marriott Hotel rooms in Yoi-do to offer pleasant environment

Coway News

Conducted the completion ceremony for the “Wi School,” a socialcontribution program aimed at helping young adults start businesses

The completion ceremony for the first session of the Wi School was held at thehead office on May 20.

The "Coway Wi School" program was prepared to support startups bycapitalizing on Coway's unique one-man business cultivation capability.Currently, more than 20 thousand one-man companies called Cody, servicespecialist, and Bluebird, young sales specialist, are working in Coway.

Coway’s CEO Hae-sun Lee and about 100 trainees attended the ceremonyconsisting of congratulatory message of the CEO, presentations on their startupbusiness plans, and awards.

- Six teams of the first session of the Wi School presented their business plans.

IR WEBZINE2017. May

Particularly, startup business plans of six teams who are members of the first session of the Wi School won great response.Those were completed through a total of 11 regular courses of the Wi School and mentoring services by an innovativestartup cultivator group “UNDERDOGS.” Major items were as follows: “HYUNTA TRIP” service to help free travelers in Chinaand Asian countries match local travel buddies; “T fine” service to offer tailored blending teas; “Farewell” pursuing rationalfuneral culture; “MY SECRET BAG,” a platform to share luxury handbags; “normgamestory” aimed at offering gamescenario consulting services; and “DESIGN CRACY,” a campaign for political issues.

Presented items were fairly evaluated by the panel consisting of Hae-sun Lee, Coway’s CEO, Young-ha Ko, Chairman ofthe Angel Investment Association, Sung-ju Cho, a professor of business administration at KAIST. The team who presentedthe “MY SECRET BAG” item won the finals.

Seung-moo Kim, the “MY SECRET BAG” item presenter, said, “The Wi School program consisting of a variety of practicaland efficient training courses unlike other similar programs has been a great help to me, ahead of starting a new business.The mentoring service also allowed me to build up self-confidence.”

Hae-sun Lee, the CEO, said, “We intended to provide young adult startups with more effective trainings to help themsecure competitiveness. We will continue to develop realistic and effective programs that can offer opportunities for hopeand challenge to young generations."

The second session of the Wi School will start in the second half of this year.

Coway News

Coway’s CEO was inaugurated as the Chairman of the Korea MarketingAssociation.

Coway’s CEO Hae-sun Lee was inaugurated as the chairman of the KoreaMarketing Association. The ceremony was held at Novotel Ambassadors Hotel inGangnam-gu, Seoul, on May 19.

* Hae-sun Lee, the CEO of Coway (right) / Dae-yeon Won, honorary Chairmanof the Korea Marketing Association (left)

Coway’s CEO Hae-sun Lee had served as the Vice President of Amore Pacific andCEO of CJ O Shopping and CJ CheilJedang. He is recognized as a professional inthe consumer marketing sector that pursues the realization of customer value.

IR WEBZINE2017. May

Coway News

Showcasing upgraded heart services

Coway started its upgraded “Safe Heart Service” on May 17, which includes theCody-On service that customers can directly experience and satisfy, special careservice, and follow-up management service as well as existing care services.

The Cody-On service provides customers with visualized product inspectionresults through mobile devices. It has not been easy for Cody to describeinspection results in detail after conducting the Heart Service, while the Cody-On service makes it possible for customers to easily understand the resultsthrough images. Moreover, image-based preview service is available beforeCody’s visit through the function of pushing alarm.

The special care service is to replace major hygiene-related parts of waterpurifiers to help customers use them with an easy mind. Until now, this servicehas been offered to only rental customers who have used some water purifiermodels for 29 months. This service is expanded to all water purifier models fromthis May and the scope of parts replacement is extended to water pipes, fitting,tubing, and faucet. In addition, Special Doctor who is specializing in installationand after service visits customers to provide checkup, sterilization, cleanup, andparts replacement services.

Coway also enhance its follow-up management service by evaluating customersatisfaction and monitoring their opinions after the implementation of the HeartService. In particular, the service responsibility system is introduced to elevateentire service quality ranging from receiving customer complaints to solvingthem and confirming improvements in an integrated manner. And the processesand results are reported to the Quality Committee consisting of staff ofdepartments responsible for product development, production, customerservice, and quality control. On top of that, Coway plans to increase its servicequality in real time through the IoCare service.

Hyun-jeong Yoon, the head of Strategic Innovation HQ, said, “We will make aconcerted effort for service innovation with the aim of offering ourdifferentiated services where customers can directly experience.”

- Checking the result before and after its heart service through mobile application- Replacing major hygiene-related parts of water purifiers for rental customers- Enhancing customer satisfaction even in follow-up management

IR WEBZINE2017. May

Coway News

Coway Blue Bird members to keep customer safety

Coway announced on May 16 that it starts training about cardiopulmonaryresuscitation for the Blue Bird members to help them respond to emergency ofcustomers.

This training is offered to about 150 Blue Bird members at the Coway headoffice located in Jung-gu, Seoul, for four days from May 15 to 18. Coway plansto expand this training into more than 400 Blue Bird members all over thecountry.

Coway commissions the Korea Emergency Care Training Institute for thistraining with the aim of helping Blue Bird members rapidly takecardiopulmonary resuscitation if an emergency occurs when they visit or meetcustomers.

Blue Bird members receive not only theory educations such as the “importanceof cardiopulmonary resuscitation” and “fundamentals and understanding ofcardiopulmonary resuscitation” but also practice training. The certificate aboutthis training is given after a certain evaluation. Considering businesscharacteristics, Blue Bird members visit customers six or seven times a day forconsultation and go around every corner of alleys to develop new customers.Therefore, Blue Bird members who complete this training will play a role as thecustomer safety keeper by promptly taking emergency measures.

Young-seop Kang, the head of W Business Div., said, “This training wasprepared to achieve Coway’s mission “Healthy Environment, Happy People.” Wewill make a concerted effort to care for customers in diverse areas.”

- Offering theory and practice training about cardiopulmonary resuscitation to 150 Blue Bird members- Playing a role as the customer safety keeper after finishing the training- Planning to expand the training into all Blue Bird members

IR WEBZINE2017. May

Coway News

Held the “Coway Run” marathon race in Malaysia

Coway held the first “Coway Run” marathon race in Damansara, Malaysia, onMay 7, in which more than 4,000 local people participated. This event wasprepared to deliver the value of clean water to local people, ending in greatsuccess.

Our Malaysia subsidiary has enjoyed a steep growth of approximately 110%CAGR in the local water purifier market since the establishment in Kuala Lumpurin 2006. Today it demonstrates the largest share in the Malaysian water purifiermarket. Sales in 2016 reached KRW 143 billion (corresponding to 510 millionringgit), and sales in 1Q 2017 rose by 48.5% from the previous year to KRW43.7 billion. As of April 2017, the number of customer accounts surpassed 500thousand.

This event was planned to share the value of a cup of clean water withparticipants through the marathon race under the concept of “Drink Up, RaceOn.” Hae-sun Lee, the CEO of Coway, also finished a 5-km marathon race toencourage the challenging spirit and passion of participants.

Particularly, Coway installed three large-sized water purifiers with the height of3.6 meters to help participants slake their thirst, receiving appeal much to them.

A participant Zoe Ng Chui Han said “I enjoy marathon for better health. Cleanwater offered through the race cheered me up. This event helped me have trustin Coway and feel better.

Hae-sun Lee, the CEO of Coway, said, “We prepared this event with the aim ofcelebrating our leadership in the market and sharing the value of healthy lifeCoway pursues with local people. We will evolve into a global hidden championby enhancing the competitiveness of our overseas business.”

Meanwhile, Coway plans to hold the “Coway Eco Run” marathon race in Koreaon June 5 in commemoration of the World Environment Day.

- Held a marathon race to celebrate our leadership in Malaysia- More than 4,000 local people participated in the race.- Installed large-sized water purifiers on the marathon course to provide participants with clean water

IR WEBZINE2017. May

IR Activities

EVENT

DATE

LOCATION

NOTE

Conference

2017-05-18

Jangchung-dong Silla

Samsung Securities

EVENT

DATE

LOCATION

NOTE

Domestic NDR

2017-05-16

Domestic institutional investors

Meritz Securities

EVENT

DATE

LOCATION

NOTE

Conference

2017-05-10 ~ 05-12

Japan

CLSA

IR WEBZINE2017. May